ThinCats was the top alternative lender for M&A transactions in 2023 and the largest lender overall in the capital, new research has found.
Experian Market IQ’s 2023 M&A report found that ThinCats funded 41 deals last year, coming second behind HSBC which funded 56 deals.
Triple Point Private Credit, another non-bank lender, came in third place with 26 deals.
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The report also showed that ThinCats was the leading debt provider to the London M&A market with 12 deals, ahead of HSBC (nine deals) and Triple Point Private Credit (eight).
However, there was diminished activity overall in the M&A market last year, with the total number of UK deals falling by 12 per cent year-on-year to 6,426.
The total value of UK M&A in 2023 fell by 21 per cent to £194bn – the lowest recorded value on Experian record since 2003.
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Looking at those transactions which involved external debt, volumes were down 20 per cent compared to 2022.
Analysis of the underlying data by ThinCats found a significant shift in the type of lender providing external debt for M&A transactions.
The big five banks saw their collective market share fall from 63 per cent in 2014 to 28 per cent in 2023, ThinCats said.
During the same period, alternative lenders’ market share rose from two per cent to 28 per cent.
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“The report reveals that businesses remained cautious about taking on additional borrowing to fund M&A transactions during 2023 with volumes down 20 per cent on 2022,” said Amany Attia, chief executive of ThinCats. “This is no surprise given the relatively weak economic backdrop and the rising costs of borrowing during the year, although it’s likely that interest rates have now peaked.”
